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New Zealand billionaire Graeme Hart's UCI Holdings auto parts business has filed for bankruptcy protection in the United States as it looks to restructure.

In a statement, the company said it had filed under Chapter 11 of the United States Bankruptcy Code. Chapter 11 allows a debtor to reorganise their financial obligations while remaining in control of their assets and gives protection from creditors taking legal action.

"UCI commenced the filing to deleverage the company and better position the company for future growth", it said. The filing includes the company's US businesses - Airtex Products, ASX Industries and Champion Laboratories - but not Hart's Autoparts Holdings.

In February, UCI missed a US$17.3 million interest payment to bondholders, who hold US$400 million in bonds set to mature in February 2019. The bonds were sold during Hart's 2011 leveraged buyouts of UCI for US$980 million and a separate auto parts firm, FRAM Group, for US$950 million.

Holders of the debt include BlackRock, JP Morgan, Credit Suisse and Pimco, according to Reuters data. In March, most of the bondholders agreed not to take any action against UCI over the failure to pay, prompting Standard & Poor's to cut UCI's credit rating one notch to a 'CCC' or 'junk' rating, meaning the rating agency saw a 50/50 chance the auto parts firm would default on its debt.

The yield on the bonds was last at 82 percent, having been near 16 percent before UCI last reported earnings in October. A soaring bond yield means the value of the debt has slumped and typically suggests that bond investors see less chance of getting interest payments or their money back.

The company said it was working with leading bondholders on the terms of a consensual restructuring and doesn't expect the filing to have an impact on the day-to-day operations of the company.

Hart put UCI in strategic review in 2014 and amended the company's credit agreements to enable asset sales, before selling its Wells vehicle electronics business for US$251 million. The auto parts firm refinanced US$75 million of bank debt with a new credit line with Credit Suisse in September last year, which left it with debt of US$477.1 million as at Sept. 30, and a month later it repaid US$12 million of that facility.